One of the differences between small and large companies is that larger companies have distinct departments for research, product development, production, marketing, sales, customer service, etc. Which is “cause” and which is “effect”? Do successful companies expand the number of departments once they’ve grown or do they expand the number of departments so they can grow?
Ask yourself if your company’s growth has been stifled by an assumption that you need lots of available resources to establish new departments. Sometimes, a misimpression about what constitutes a “department” is behind a reluctance to expand. Don’t start by buying desks and recruiting! Remember that the first step is conceptual.
This idea is very relevant if your company still has a person with one of those fuzzy generalist titles like “Business Development.” Fearing loss of control, “Vice Presidents of Business Development” often resist drawing the distinctions between research, marketing, sales, and customer service. But I’ve noticed that when these functions have become blurred into one role, those companies seem to only measure sales results and miss causal issues. What if there’s a hidden problem with the message (marketing)? What if a problem stems from a misunderstanding of market trends (research)?
Even if you are inclined to retain a bright generalist over multiple departments, it is amazing what happens when the deliverables (results) for each functional area are spelled out. Each functional area (department) owes results to another department. For example, research owes objective reliable insights to guide product development. Marketing owes qualified leads and prospects to sales. The process of spelling out deliverables for each functional area helps busy multi-tasker(s) see areas where they could outsource small pieces without losing control or hiring employees before they are ready to do so. When the deliverables are spelled out, the multi-tasking generalist can also see which department should be staffed first to help drive growth.
Is it “BUSINESS DEVELOPMENT” or “Research, Product Development, Marketing, and Sales”?
It’s not your imagination. There IS a pattern to my recent blog entries: denial and avoidance.
One client recently became worried when yet another salesperson quit. They had checked the competitive landscape to make sure they were providing appropriate compensation, incentives, and benefits. They had used outside assistance during recruitment, screening, and selection. They had improved their orientation and training program. They provide a superior product. They had clear territories, lists, systems, and access to resources.
They were tempted to mechanically crank up the recruitment machine to replace the salesperson. Even WORSE, with the slowed economy and squeezed resources, they seriously considered NOT filling the vacant sales position at all.
But either of those approaches could become very expensive.
It is time to pause and do just a little bit of research before making a decision.
Is this economy so different that even seasoned sales people can’t make it work in their marketplace? Is there something about how this company operates on a day-to-day basis that isn’t conducive to retaining experienced sales people? Or is there something about the boss?
Are there any uncomfortable questions YOU are avoiding that could lead to expensive mistakes?
Imagine that you’ve decided to invest in market research to gain a better sense of peoples’ problems, needs, buying patterns, and price sensitivity. You obtain proposals from several research firms and experience disappointment and “sticker shock.” One firm takes such a “macro” view, you feel like you will be lost in “analysis paralysis” for months on end. You are convinced that if you go with them, you will end up with outdated information and run out of money. A second firm seems overly impressed by their technology. It’s like a bad game of Jeopardy® where the question is always “internet surveys” no matter what the desired answer is. A third firm seems too academic. The desire to have statistical validity and reliability outweighs practicality. All of the firms seem to skip right past your company’s existing capabilities.
If this happens to you, don’t be intimidated.
It’s true. Most companies blur research, marketing and sales into one big blob. Should you?
These days, we ALL seem to have so much more riding on our product development decisions. While customer expectations are going up up up, availability of growth financing has been going down down down. Some formerly tangible products (like books and music) are now digitally delivered, which raises the bar on customization and updating. The global economy increases competition for even the most “locally” oriented companies. Wal-Mart now delivers its $4.00 prescription drugs directly to the consumer’s home. That must certainly have an impact on large chains, let alone the local community drug store.
Objective research differs greatly from message-driven marketing. It’s a completely different mindset. There is a science behind sample size and statistical reliability and validity.
Like the IT department, a research department can get assignments from the full range of functional areas…not just marketing. The CFO or controller may need assistance researching possible candidates for acquisition. The product development department may need assistance conducting a BETA TEST of a prototype. The research department could be asked to measure the needs and receptivity of various target/niche markets. The customer service department may need assistance with the objective measurement of customer satisfaction. And yes, the marketing department may need the research department to study competition, brand recognition, response to campaigns or packaging, price sensitivity, etc.
Yes, research can be outsourced. There are several excellent research companies.
But, if your company is facing accelerated change, increased risk, intensified competition, tough judgment calls, the need to expand into new markets, etc. you may well need to establish your own research department. If you aren’t centered, farming out miscellaneous research projects can become expensive, disjointed, and frustrating. I have found that outside research firms respond very differently when they are retained by professional researchers (peers).